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With New York having the fourth highest auto insurance premiums in the nation, the New York Public Interest Research Group (NYPIRG) says blue collar workers shouldn't have to pay more for car insurance than their college educated counterparts.
(AP Photo)

STATEN ISLAND, N.Y. -- A New York watchdog group says blue collar workers with high school diplomas are charged more than their educated, professional counterparts for auto insurance from several top companies.

With New York having the fourth-highest auto insurance premiums in the nation, the New York Public Interest Research Group (NYPIRG) says blue collar workers shouldn't have to pay more for car insurance than their college educated counterparts.

HERE'S AN EXAMPLE:

NYPIRG used the profile of a 30-year old single woman living on Staten Island to compile the following annual insurance premiums:

Geico:

$663, bank executive with a college degree.

$734, bank executive with a high school diploma.

$663, bank teller with a college degree.

$771, bank teller with a high school diploma.

Liberty Mutual:

$2,292, bank executive with a college degree.

$2,892, bank executive with a high school diploma.

$2,292, bank teller with a college degree.

$2,892, bank teller with a high school diploma.

Progressive:

$2,541, bank executive with a college degree.

$2,953, bank executive with a high school diploma.

$2,699, bank teller with a college degree.

$3,043, bank teller with a high school diploma.

NYPIRG study findings show that high-school educated blue collar workers
in the state -- particularly on Staten Island -- pay more for their car
insurance than professionals with college degrees at several top
insurance companies.

"Auto insurance rates should be based on how you drive, not who you are," said Andy Morrison, NYPIRG consumer advocate.

"This pricing model has a desperate impact, because you're essentially
talking about low income communities, communities of color and other
protected classes, who are often finding themselves in the lower tier
and are paying more for the same coverage," he added.

Morrison said NYPIRG is asking the state Department of Financial Services to undertake a thorough review of rate-making practices by auto insurers in New York.

The Department of Financial Services did not immediately respond to Advance queries about the issue.

However, insurance experts contend rates are simply based on statistical data.

"Insurance is a highly regulated industry and if insurance companies are charging these rates based on profession and occupation then it's what their actuary tables are showing them. It's all about risk...The rates are based on risk and statical analysis," said Robert Sinclair, a spokesman for the New York Automobile Association of America (AAA).

Said Morrison, "Our view is this is more for marketing purposes. If you offer better rates to affluent people, those folks will get policies for their two cars."

NYPIRG's research, conducted from January to April, says that for the minimum liability coverage required by New York State, three of the top five auto insurers considered education when setting premiums, and two considered occupation.

"Our
analysis shows that insurers are using factors that discriminate
against many low- and moderate-income New Yorkers -- the very New Yorkers
who can least afford such high rates," said Morrison.

The findings include:

Geico, the state's largest insurer, charges 19 percent more annually for a bank teller with a high school degree than for a bank executive with a college degree with all other things being equal. And a high school graduate who worked in retail would pay 41 percent more annually than the same bank executive with a high school degree.

Progressive, the state's fifth largest insurer, would charge 19 percent more annually for a bank teller with a high school degree than for a bank executive with a college degree. Progressive also would charge drivers who opted for monthly payments 21 percent more than drivers who paid their premiums in full.

Liberty Mutual, the state's fourth largest insurer, did not appear to consider occupation in their pricing, but did consider education. It would charge a high school graduate 25 percent more annually than a college graduate.

Allstate, the second largest insurer in New York, did not allow the
gathering of pricing information without authorizing a credit check

However, State Farm, the state's third leading writer of auto insurance, does not
use education or occupation to price automobile insurance.

"We use prior claims experience and other factors to project what the number and cost of what the future claims will be," said Rachael Risinger, a spokeswoman for State Farm Insurance.

NYPIRG used the websites of these insurers to determine whether they consider education and occupation as factors in their pricing, and if so, the impact those factors have on rates.

For each analysis, all factors except education and occupation were held constant. The driver profile used by NYPIRG was a 30-year old single women living in moderate income areas in Albany, Buffalo, Patchogue, Poughkeepsie, Queens, Staten Island and Syracuse with a $30,000 to $40,000 median income, driving a 2008 Honda Civic 7,500 miles annually, and who has been driving for 14 years.

NYPIRG contends that in some cases, drivers with non-professional, non-managerial jobs and less education paid more despite having better driving records or driving fewer miles annually.